Sensex, Nifty at record closing high; HDFC twins, TCS fall

19 Aug 2014

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03:30 pm Market closing
The market ends on another record high level. The Nifty ended at 7897.50, up 23.25 points while the Sensex was up 29.71 points at 26420.67. Both the benchmark indices were up for sixth day in row. M&M, Tata Motors, BHEL, Bajaj Auto and Dr Reddy's Labs were top gainers in the Sensex. Among the losers were HDFC twins, TCS, Hindalco and Sun Pharma.

03:00pm Maruti hits all-time high
Shares of Maruti Suzuki hit a record high of Rs 2,750 on Tuesday, up over a percent after Deutsche Bank believes the fall in gasoline prices will be beneficial for the company.

The brokerage house maintains Maruti as its top pick in the Indian auto sector with a target price of Rs 3000 a share.

Gasoline prices in India have declined 4 percent since the beginning of FY15 after rising by 11 percent per annum during FY11-14. Deutsche believes this is a positive development for entry-level car (Alto/WagonR) demand as the buyers in this segment have been most impacted by high gasoline prices and elevated levels of inflation and interest rates over the past three years.

The entry-level market fell 10 percent, 13 percent and 6 percent during FY12, FY13 and FY14 and its volume share reduced from 32 percent to 23 percent of industry volumes.

According to the brokerage, Maruti will be the key beneficiary of a recovery in entry level cars as it has a 74 percent share in this segment compared to its overall marketshare of 42.1 percent.

02:45pm FII View
Neelkanth Mishra, Credit Suisse says the less than earlier feared impact on agricultural output may not help control inflation.

''We continue to believe rising labour costs are the root cause of food inflation. Spot power tariffs have increased partly due to the drop in hydro power output. This effect should fade post August, but can help September 2015 results for generators with high spot sales. We stay underweight PSU banks, industrials and metals,'' he adds.

02:25pm Sesa Sterlite on buyers' radar
Sesa Sterlite shares remained in demand as the Goa government decided to renew 27 mining leases after chief minister Manohar Parrikar informed the state assembly that the government will not oppose the high court order. The high court had earlier called for renewal of licences.

According to Parrikar, it is not the fault of lease-holders if the previous government failed to renew their mining leases. The Goa bench has ruled out the process of auctioning mining leases.

The 27 lease-holders have already paid stamp duty. Ritesh Shah of Espirito Santo believes the Goa government has been rather pro-active on mining, considering it has already collected stamp duty for 27 leases. ''It is a positive thing and it is already there in the price,'' Shah told CNBC-TV18.

The Goa bench has said that it will take a call on granting leases for remaining leases in three months. It added that renewed leaseholders can't claim net proceeds of e-auction.

The bench also said that the Goa government can renew leases under the law. The renewal of leases is equivalent to grant of new leases and miners don't need to approach the Supreme Court again.

Companies like Sesa Sterlite have gained a lot on the back of this order. Shah has a 'Buy' rating on the stock with a fair value of Rs 368, which is a 20 percent upside from current levels.

02:00pm The market continued to see buying interest with the benchmarks heading towards positive close for the sixth consecutive session today. The Sensex rose 62.92 points to 26453.88 while the Nifty gained 27.40 points at 7901.65.

The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising over a percent. About 1550 shares have advanced, 1245 shares declined, and 110 shares are unchanged.

Jyotivardhan Jaipuria of Bank of America Merrill Lynch says the market would be driven by reform newsflow rather than earnings growth in the near term. However, he expects a strong rebound in earnings from the second half of CY15. He thinks that the Sensex earnings per share growth may now aggregate 15 percent for the year, marginally lower than their current bottoms up number of 18.5 percent.

Shares of Tata Motors, Mahindra and Mahindra, Sesa Sterlite and Dr Reddy's Labs topped the buying list, up 2-3 percent followed by ICICI Bank, Larsen and Toubro, ONGC, Axis Bank, Bajaj Auto, Maruti, Coal India, Hero Motocorp and BHEL with over a percent.

Oil marketing companies like HPCL, BPCL and IOC continued to trade with gains of almost 4 percent each due to Brent crude near 14-month lows and the Indian crude basket fell by more than USD 5 to USD 100.04 per barrel. Reports also suggest that the diesel under-recovery might get wiped out by September.

Global cues too remained positive today as Europe traded with more than 1 percent gains. FTSE rose for the fifth straight session ahead of July inflation data.

1:35 am Market opinion: With market climbing new highs, and stable macro situation, one must stay invested in this market says Sashi Krishnan, CIO, Birla Sun Life Insurance. Key indices are trading at all-time highs, while midcap stocks have seen gains of 1 percent in last two days. Speaking to CNBC-TV18, Krishnan says stability in the macro system is a big relief, although inflation remains a bit of a worry. "That too will ease as ravi crops come in market by December," leading to good recovery in growth. Meanwhile, interest rates appeared to have peaked out and are likely to see a decline in 2015, Krishnan says. Krishnan is comfortable with crude price for now, even expects further dip, but worries about gas pricing issue. He advises investors to pick midcaps selectively based on earnings and quality of management.

The market is consolidating after hitting fresh record highs in early trade. The Sensex is up 76.95 points at 26467.91 and the Nifty adds 32.90 points at 7907.15. About 1528 shares have advanced, 1169 shares declined and 128 shares are unchanged.

M&M, Sesa Sterlite, Dr Reddy's Labs, Tata Motors and BHEL are top gainers in the Sensex. Among the losers are HDFC, TCS, Sun Pharma, HUL and Hindalco.

Gold prices rose to Rs 28,311 per 10 grams in futures trading today as speculators
enlarged positions amid a firming trend overseas. At the Multi Commodity Exchange, gold for delivery in October moved up by Rs 17, or 0.06 per cent, to Rs 28,311 per 10 grams in a business turnover of 265 lots.

Brent crude oil shed nearly USD 2 a barrel to reach its lowest price in over a year on Monday as investor concerns over conflict in Ukraine and Iraq eased, and as higher Libyan oil output added to already ample supplies.Crude pared gains from Friday's spike when the government in Kiev said its artillery had partially destroyed a Russian armoured column.

12:55pm Arvind forays into E-commerce
Arvind forayed into E-commerce with custom clothing brand Creyate. "Arvind Internet is ready to revolutionise fashion and retail across India this year with its online custom clothing brand," said the company in its filing.

Kulin Lalbhai, executive director of Arvind, is driving the E-commerce initiative at the company. He said, "We are all set to be a leading consumer lifestyle player in the digital space by engaging in several business models that can scale globally. We aim to be a Rs 1000 crore plus business in three years."

12:40pm JSW Steel in News
JSW Steel said it has entered into a definitive agreement with Welspun Enterprises (WEL), pursuant to which the company will acquire the entire equity shares held by WEL in Welspun Maxsteel (WMSL) for an enterprise value of Rs 1,000 crore and net current assets as of an agreed date of August 31.

The company has installed capacity of 14.3 million tonne per annum and has a strategic goal to enhance its steel production to 40 MTPA in the next decade. WMSL has an installed capacity of 0.9 MTPA gas based DRI plant, with a captive jetty and a captive railway siding.

12:20pm FII View
In an interview to CNBC-TV18, discussing the Indian markets , Richard Gibbs, Global Head of Macquarie Securities, said they have been buying Indian equities recently, but feels monsoon would remain a problem for the markets.

Though he does not see rate cuts from RBI anytime soon, he has ''big expectations'' on structural reforms from the Narendra Modi government.

Gibbs feels things would be tough on deficit front for India in the short-term.

12:00pm Equity benchmarks as well as broader markets remained in positive terrain in noon trade. The Sensex rose 22.99 points to 26413.95 and the Nifty advanced 15.75 points to 7890.

The BSE Midcap and Smallcap indices outperformed benchmarks, up 0.9 percent each. About 1397 shares have advanced, 1153 shares declined, and 135 shares are unchanged.

Tata Motors, ICICI Bank, Larsen and Toubro, ONGC, YES Bank, Wockhardt and Bharti Airtel are most active shares on exchanges.

Shares of Tata Motors, ICICI Bank, Larsen and Toubro, Sesa Sterlite, Mahindra and Mahindra, Axis Bank, Dr Reddy's Labs, Maruti Suzuki, Hero Motocorp and BHEL gained 1-2.6 percent. However, Hindustan Unilever, TCS and HDFC fell 1-2 percent. ITC, HDFC Bank, Sun Pharma, ONGC and Reliance Industries declined 0.2-0.7 percent.

11:30 am Buzzing: Shares of oil marketing companies are extending the spectacular rally seen yesterday as crude prices are still at 14-month low. HPCL, BPCL and IOC are up 3-4 percent each intraday on Tuesday. Goldman Sachs bullishness on the sector is also adding to the euphoria.

The brokerage sees almost no losses on diesel after September price hike and expects greatest upside for HPCL and BPCL with improving marketing margins. As losses on retail diesel sales are now down to Rs 0.8 per litre, Goldman Sachs estimates it  to fall to Rs 0.3 per litre after the price hike on September assuming oil prices and diesel cracks remain around current levels.

''This implies we could effectively be done with the monthly cycle of diesel price increases in next two months and diesel will be market-priced,'' it says in a report.  

The market is going steady with the Nifty hovering around 7900, up 24.25 points at 7898.50. The Sensex is up 81.01 points at 26471.97. About 1369 shares have advanced, 911 shares declined, and 98 shares are unchanged.

Capital Good, Metal and Auto indices are lending support to the market. Sesa Sterlite, Dr Reddy's Labs, M&M, Axis Bank and Hindalco are top gainers in the Sensex. Among the losers are TCS, Sun Pharma, HDFC, Cipla and ONGC.

Brent crude edged up towards USD 102 a barrel, but stayed near a 14-month low reached in the previous session on weak demand and easing concerns over risks to supply. Investors are worrid over conflict in Iraq eased, and as higher Libyan oil output added to already ample supplies.

Iraqi and Kurdish forces recaptured Iraq's biggest dam from Islamist militants with the help of US air strikes to secure a vital strategic objective in fighting that threatens to break up the key oil producing country.

10:55am Interview
Sarang Wadhawan, vice chairman & managing director, HDIL expects Mumbai's realty price to rise by 20 percent in the upcoming days as he expects a traction in the demand.

Speaking to CNBC-TV18, Wadhawan says the ticket size will be in the Rs 1.2-1.5 crore range.

Furthermore, Wadhawan aims to cut down the company debt by 25 percent to Rs 2300 crore by March next year and adds that the Maharashtra government's move to increase FSI on affordable housing is a big positive for the company.

10:30am HPCL, BPCL, IOC gain 1.5-2%
Oil retailers will suffer no losses on diesel after a hike in prices in September, says Goldman Sachs.

That would mean diesel prices charged by retailers could be market-priced by September, the investment bank adds.

India has been gradually raising diesel prices every month since January 2013.

Oil retailers gain today after Brent crude hits new 14-month low. Hindustan Petroleum Corp gains 1.9 percent, Bharat Petroleum Corp rises 1.4 percent while Indian Oil Corp advances 1.3 percent, reports Reuters.

10:15am Market Expert
Corporate earnings will grow at an average compounded rate of 20 percent over the next three years, feels Pathik Gandotra, partner, Dron Capital. In an interview with CNBC-TV18, he says the economy has turned though the pace of growth may not be as quick as the market has been expecting.

He says the earnings recovery so far has been mainly in operating margins as companies cut costs. But in the third and fourth quarters of this financial year, there will be a meaningful uptick in topline growth as the economy recovers.

Gandotra feels the market is reasonably priced at around 15 times estimated FY15 earnings and around 12 times FY16 earnings. He sees the market delivering around 15-20 percent returns over the next 12 months.

10:00am Equity benchmarks erased half of early gains weighed down by HDFC, TCS and ITC. The Sensex rose 59.12 points to 26450.08 and the Nifty advanced 19.25 points to 7893.50. The BSE Midcap and Smallcap indices gained 0.7 percent each.

About 1192 shares have advanced, 744 shares declined, and 99 shares are unchanged.

Housing finance company HDFC and top software services exporter TCS fell more than a percent followed by ITC and Sun Pharma with over 0.5 percent. ONGC lost early gains, down 0.3 percent on profit booking.

However, Sesa Sterlite kept its top position in the buying list, up over 3.4 percent. Larsen and Toubro, Tata Motors, Axis Bank, Bharti Airtel, Dr Reddy's Labs, Hero Motocorp, BHEL and Wipro climbed 1-2 percent.

Shares of Infosys, Reliance Industries, State Bank of India and ICICI Bank gained marginally.

10:00am Adani Ports in News
Gujarat-based Adani Group on Monday said it was all set to expand the Dhamra Port's capacity to 100 MT per annum in Odisha's Bhadrak district.

"We are going to start work on expansion of the Dhamra port. Orders have been placed for the purpose. Our vision is to build the Dhamra port on the scale of the Mundra port", Adani Group chief Gautam Adani told reporters after meeting Chief Minister Naveen Patnaik and Chief Secretary G C Pati here.

The company, which acquired the Dhamra Port from L&T and the Tatas by paying about Rs 5,500 crore, targets to enhance the port's capacity from 25 MT to 100 MT, reports PTI.

Dhamara Port Company Limited (DPCL) chief executive officer Santosh K Mohapatra said: "DPCL had sought 700 acres of land for the expansion project which was sanctioned by the state government. We will begin work on expanding the port capacity soon."

09:45am Sesa Sterlite in focus
Shares of Sesa Sterlite, the subsidiary of London-listed Vedanta Resources, gained more than 4 percent on Goa government's announcement of resuming operations in the mining industry by year-end.

The State government has decided to renew the 27 mining leases after Goa chief minister Manohar Parrikar informed the State Assembly that the government will abide by the High Court order.

The High Court order given by the Goa bench of the Bombay High Court had asked and directed the State to grant mining leases to 27 leaseholders that had made payment of stamp duty and were promised that their mining leases will be given to them. In addition, it has also asked for the rest of the leases to be given within three months.

In the assembly today, Goa chief minister Manohar Parrikar said the leases will be granted to 27 leaseholders like Sesa Sterlite, Fermento and Salgaoncars amongst others by September 20 and the rest of the leases will be given by October 15.

09:30am FII View
Jyotivardhan Jaipuria, Bank of America Merrill Lynch says the brokerage continues to believe that near-term markets would be driven by reform newsflow rather than earnings growth. ''We, however, expect a strong rebound in earnings from second half of CY15,'' he adds.

''Our view has been that a bulk of downgrades is behind us but we were expecting FY15 earnings to be downgraded at around 12-13 percent. Given the Jaguar Land Rover (JLR) surprise, we think Sensex EPS growth may now aggregate 15 percent for the year, marginally lower than our current bottoms up number of 18.5 percent,'' says Jaipuria.

09:15am Equity benchmarks opened half a percent higher on Tuesday with the Nifty rising above 7900 level supported by positive global cues, and capital goods, oil & gas, banks and metals stocks.

The Sensex rose 124.85 points to 26515.81 and the Nifty climbed 35.95 points to 7910.20. About 817 shares have advanced, 177 shares declined, and 19 shares are unchanged.

Sesa Sterlite topped the buying list, up 3.64 percent followed by Larsen and Toubro, BHEL, Coal India, ONGC, BPCL and Tata Power with 1-2 percent. However, TCS, Cipla, GAIL, HDFC, Wipro, DLF and Grasim Industries slipped marginally.

After four days of holiday, the Indian rupee opened on flat note at 60.77 per dollar on Tuesday against last Thursday's closing value of 60.76 a dollar.

The dollar has risen against a basket of major currencies on reduced concerns over Russia and Ukraine and positive US housing data. Data shows US home builder sentiment rising in August to its highest since January as labor market conditions improved.

Ashutosh Raina, Head-Forex Trading at HDFC Bank said, "The risk sentiment appears to have improved on the hopes of progress in the Ukraine crisis. The USD/INR appears to have touched the near-term lows and sentiment appears to have turned positive on the back of improving global scenario. Expect the pair to trade in 60-61 range with appreciating bias."

He further added, "The 10-year bonds appear to be settling in 8.50-8.80 percent range after the recent RBI action and some reduction in government borrowing."

Global markets, meanwhile, rallied on de-escalation of geopolitical risk. The S&P 500 is now within one percent of an all-time high. European markets too saw over 1 percent gains. Asian markets gained strength with the Nikkei, Kospi and Taiwan rising around a percent.

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